How the CIA Works

Photo courtesy CIA

Despite plenty of Hollywood films about the CIA and its spies, many people still don't know what the agency actually does. In this article, we'll take a look at the history of the CIA and the scandals that have rocked it through the decades. We'll see how the organization is structured today, who oversees it and what kinds of checks and balances are in place. We'll also take a look at how the spies do their jobs -- in other words, we'll see just how much of that Hollywood stuff is real.

The CIA stands for the Central Intelligence Agency. Its primary stated mission is to collect, evaluate and disseminate foreign intelligence to assist the president and senior United States government policymakers in making decisions about national security. The CIA may also engage in covert action at the president's request. It doesn't make policy. It isn't allowed to spy on the domestic activities of Americans or to participate in assassinations, either -- though it has been accused of doing both.

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­Like other aspects of the U.S. government, the CIA has a system of checks and balances. The CIA reports both to the executive and legislative branches. During the CIA's history, the amount of oversight has ebbed and flowed. On the executive side, the CIA must answer to three groups -- the National Security Council, the President's Foreign Intelligence Advisory Board and the Intelligence Oversight Board.

The National Security Council is made up of the President, the Vice President, the Secretary of State and the Secretary of Defense. "The NSC advises the President on domestic, foreign and military issues that relate to national security and provides guidance, review and direction on how the CIA gathers intelligence," according to the CIA Web site. The President's Foreign Intelligence Advisory Board comprises people from the private sector who study how well the CIA is doing its job and the effectiveness of its structure. The Intelligence Oversight Board is supposed to ensure that intelligence collection is done properly and that all intelligence gathering is legal.

On the legislative side, the CIA works primarily with the House Permanent Select Committee on Intelligence and the Senate Select Committee on Intelligence. These two committees -- along with the Foreign Relations, Foreign Affairs and Armed Services committees -- authorize the CIA's programs and oversee the CIA. The appropriations committees appropriate funds for the CIA and all U.S. government activities.

Photo courtesy CIA
CIA Headquarters -- the George Bush Center for Intelligence in Langley, Va. See more spy pictures.

Speaking of funds, the CIA budget is secret and the agency is allowed to keep its staffing, organizational structure, salaries and number of employees secret under an act passed in 1949. Here's what we do know: In 1997, the total budget for all U.S. government intelligence and intelligence-related activities (of which the CIA is a part) was $26.6 billion. That was the first year the figure had been made public. In 1998, the budget was $26.7 billion. The intelligence budgets for all other years remain classified. On the staffing front, the CIA employs about 20,000 people.

CIA History
The United States has always engaged in foreign intelligence activities. Covert action aided the patriots in winning the Revolutionary War. But the first formal, organized agencies didn't exist until the 1880s, when the Office of Naval Intelligence and the Army's Military Intelligence Division were created. Around World War I, the Bureau of Investigation (the forerunner of the FBI) took over intelligence-gathering duties. The intelligence structure continued through several iterations. For example, the Office of Strategic Services, known as the OSS, was established in 1942 and abolished in 1945.

Photo courtesy Naval Historical Center
The USS Arizona burning after the bombing of Pearl Harbor. This attack was a major intelligence failure and contributed to the creation of the CIA.

After World War II, U.S. leaders struggled with how to improve national intelligence. The Pearl Harbor bombing, which brought the United States into World War II, was considered a major intelligence failure.

In 1947, President Harry Truman signed the National Security Act, which created the CIA. The act also created a director of central intelligence, who had three different roles: the president's principal adviser on security issues, the head of the entire U.S. intelligence community and the head of the CIA, one of the agencies within that intelligence community. This structure was revised in 2004, with the Intelligence Reform and Terrorism Prevention Act, which created the position of director of national intelligence to oversee the intelligence community. Now, the director of the CIA reports to the director of national intelligence.

Photo courtesy US Air Force
General Michael V. Hayden, USAF, director of the CIA as of May 30, 2006
Two years later, Congress passed the Central Intelligence Agency Act, which allows the agency to keep its budget and staffing secret. For many years, the agency's primary mission was to protect the United States against communism and the Soviet Union during the Cold War. These days, the agency has an even more complex job -- to protect the United States from terrorist threats from all over the globe.

CIA Structure
The CIA is broken down into four different teams, each with its own responsibilities:

National Clandestine Service
This is where the so-called "spies" work. NCS employees go undercover abroad to collect foreign intelligence. They recruit agents to collect what is called "human intelligence." What kinds of people work for the NCS? NCS employees are generally well-educated, know other languages, like to work with people from all over the world and can adapt to any situation, including dangerous ones. Most people, including their friends and family members, will never know exactly what NCS employees do. Later we'll take a look at how the spies stay undercover and check out some of their cool gadgets.

Directorate of Science and Technology
The people on this team collect overt, or open source, intelligence. Overt intelligence consists of information that appears on TV, on the radio, in magazines or in newspapers. They also use electronic and satellite photography. This team attracts people who enjoy science and engineering.

Directorate of Intelligence
All of the information gathered by the first two teams is turned over to the Directorate of Intelligence. Members of this team interpret the information and write reports about it. A DI employee must have excellent writing and analytical skills, be comfortable presenting information in front of groups and be able to handle deadline pressure.

Directorate of Support
This team provides support for the rest of the organization and handles things like hiring and training. "The Directorate of Support attracts the person who may be a specialist in a field such as an artist or a finance officer, or a generalist with many different talents," according to the CIA Web site.

Next, we'll take a look at CIA scandals and learn more about spies.


Scandals and Spy Stuff

During its more than 50-year history, the CIA has been criticized for its involvement (or lack of involvement) in many controversial events. Let's take a look at a few of them:
  • Iran - In 1953, a CIA-backed coup ousted Iran's popular prime minister and restored power to the Shah of Iran. Many historians now consider this a mistake, as the Shah of Iran's repressive rule eventually led to a revolution in the 1970s. After the revolution, anti-American leaders came to power.

  • Bay of Pigs - In 1961, a paramilitary force of Cuban exiles, backed by the CIA, attacked Cuba's Bay of Pigs. Cuban forces crushed the invasion, bringing it to a quick end.

  • Watergate - In 1972, former CIA officers, part of a group working for President Nixon's re-election campaign, were implicated in the break-in at the Democratic National Committee headquarters.

  • Family Jewels - After Watergate, CIA director James Schlesinger vowed to find out if there were any other dangerous secrets in the history of the CIA. The investigation bore plenty of fruit. However, by the time the report had been compiled, Schlesinger had moved on and become the Defense Secretary. The new head of the CIA, William Colby, inherited the 693-page document known as "the family jewels." The report said the agency had plotted to kill Fidel Castro and other foreign leaders; spied on Americans, tapping their phone lines and reading their tax returns; and conducted LSD experiments on unwitting human subjects. Colby eventually turned over the report -- an attempt, he said later, to save the agency.

  • The Iran-Contra Affair - Several members of the Reagan administration violated an embargo by helping to sell arms to Iran. The proceeds were used to fund the Contras, a right-wing guerrilla group in Nicaragua. In 1986, President Reagan affirmed that defensive weapons were transferred to Iran. Later, information surfaced that CIA director William Casey was involved in the scandal.

    Photo courtesy US Department of Congress/Office of Security
    A CIA Security Awareness poster showing Aldrich Ames in his prison cell

  • Aldrich Ames - This CIA officer spent nine years as a mole for the KGB. He turned over the names of many spies that the U.S. had working in the Soviet Union. The KGB paid Ames more than $2 million and kept another $2 million earmarked for him in a Moscow bank, making him the highest-paid spy in the world [ref]. Ames was arrested in 1994 and is serving a sentence of life in prison.

  • Sept. 11, 2001 - Terrorists carried out the largest act of terrorism ever to take place on U.S. soil, and the CIA (along with the rest of the intelligence community) was criticized for failing to stop the attacks. Part of the problem, critics have said, is that the different intelligence agencies were not working together. Since then, the CIA has beefed up its spy program, training many new officers. There have also been structural changes within the overall intelligence community to ensure cooperation between agencies.

  • Valerie Plame Wilson - CIA covert officer Valerie Plame Wilson was publicly exposed in 2003, setting off a major Washington scandal. Conservative writer Robert Novak outed her in a newspaper column. The ensuing investigation has centered on who leaked her name to Novak. It is a crime to purposefully blow the cover of a U.S. intelligence operative. A federal probe began in September 2003, and former Vice Presidential Chief of Staff Lewis Libby was indicted on charges of lying and obstruction of the probe. As of May 2006, nobody has been charged in the actual leak.

Spy Stuff

Image courtesy CIA
dead drop spike

Image courtesy CIA
microdot camera

Image courtesy CIA
silver dollar hollow container
About a third of the agency's estimated 20,000 employees are undercover or have been at some point in their CIA careers, according to a Los Angeles Times story, which delved into just how they keep those covers.

Most of the agency's overseas officers are under official cover, meaning they pose as employees of another government agency, such as the state department. A much smaller number are under nonofficial cover or NOC (pronounced "knock"). This means they usually pose as employees of real international corporations, employees of fake companies or as students. Valerie Plame worked as a NOC, posing as the employee of a shell company in Boston called Brewster-Jennings. NOC is more dangerous than having an official cover, because if NOCs are caught by a foreign intelligence service, they have no diplomatic immunity to protect them from prosecution in that country.

In a newspaper interview, an anonymous source said that he posed as a mid-level executive at multinational corporations while collecting intelligence overseas for more than a decade. He worked several years as a business consultant before joining the agency, giving him a great resume for the NOC program. Senior executives at his cover employer's were aware of his real job, but his coworkers day-to-day were not. He carried out the normal duties that someone in his cover job would do, once even working on a $2 million deal. However, he also often spent three or four nights a week holding clandestine meetings.

There is plenty of lore about the cloak-and-dagger lives that spies lead. Some of it is just that -- lore. On the other hand, spies through the years really have used a variety of gadgets and technology to do their jobs. Some are now enshrined at the CIA Museum. Highlights of the museum include:

  • The dead drop spike, a concealment device that has been used since the late 1960s to hide money, maps, documents, microfilm and other items. The spike is waterproof and can be shoved into the ground or placed in a shallow stream to be retrieved later.

  • The Mark IV microdot camera was used to pass documents between agents in East and West Berlin during the 1950s and '60s. Agents took photographs that were the size of a pinhead and glued them to typed letters. The agent who recieved the letter could then view the image under a microscope.

  • The silver dollar hollow container is still being used today. It looks like a silver dollar and can be used to hide messages or film.

    Image courtesy CIA
    A pamphlet dropped during the Persian Gulf War

  • CIA-produced pamphlets, which were dropped during the Persian Gulf War, warning civilians of a bombing run and giving military units an opportunity to surrender.

Though the agency has had its share of failures and scandals, the government still depends heavily on the CIA to provide intelligence and assist with maintaining national security. Although terrorism intelligence is the CIA's current focus, the United States will always have a need for counterintelligence, espionage and covert action.

For lots more information about the CIA and related topics, check out the links on the next page.


Lots More Information

Related HowStuffWorks Articles

More Great Links


  • CIA
  • Corral, Oscar. "Bay of Pigs vets have put their loss in perspective." Knight Ridder Newspapers, April 20, 2006.
  • Crime Library
  • International Spy Museum
  • "Ironically, keeper of CIA secrets exposed 'Family Jewels'." Houston Chronicle, May 7, 1996.
  • Kinzer, Stephen. "History Lesson: Stop Meddling." Los Angeles Times, May 13, 2006.
  • Miller, Greg. "The nation; Shades of cover." Los Angeles Times, July 16, 2005.
  • Ranelagh, John. "The Agency: The Rise and Decline of the CIA." Touchstone Books, 1987. ISBN 0671639943.
  • Rich, Motoko. "Valerie Plame seeks book deal." New York Times, May 4, 2006.
  • Squeo, Anne Marie. "Rove testifies for the fifth time before grand jury in leak case." Wall Street Journal, April 27, 2006.
  • "Unmasking of undercover agents and the subsequent danger to national security." National Public Radio, July 21, 2005.
  • Weiner, Tim. "William E. Colby, head of the CIA in a time of upheaval." New York Times, May 7, 1996.
  • Wolf, Julie. "Regan: The Iran-Contra Affair." The American Experience,, 2000.
  • Yancey, Kitty Bean. "An immersion in clandestine affairs at spy museum." USA Today, July 12, 2002.